Kyl, Democrat Bill Nelson Expected Soon To Introduce Estate Tax Repeal Legislation

Reproduced with permission from Daily Tax Report, No. 18, p. G-11 (Jan. 28, 2005). Copyright 2005 by The Bureau of National Affairs, Inc.(800-372-1033)

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Sen. Jon Kyl (R-Ariz.) soon is expected to introduce a bill
to permanently repeal the estate tax, with a Democratic co-sponsor and the backing of business lobbyists that, heartened by President Bush's push for tax cut permanency, are eager to do away with what they call the "death tax." Sen. Bill Nelson (D-Fla.) will be the Democratic co-sponsor of the bill, which is likely to be introduced the week of Jan. 31, according to a Nelson aide. The aide said Nelson feels that Congress should act sooner rather than later to make permanent the repeal, which it will probably end up doing anyway before the currently scheduled repeal sunsets in 2011. Other Democrats have an interest in the measure, the aide said. That would make garnering the 60 votes necessary to pass the bill outside of the reconciliation process certainly doable, the aide said, adding that action would be likely to occur during the first half of the year. Familiar foes of the repeal are still opposed, however. Sen. John McCain (R-Ariz.) told BNA Jan. 25 he remains opposed to the estate tax repeal.

Business Backing

Business groups, especially those representing small
businesses that tend to be family owned, have pushed for
years to eliminate the estate tax, while groups of wealthy individuals have opposed such a move on the basis that they are the last segment of the population that deserves a tax break. Phil Beram, chief tax counsel for the U.S. Chamber of Commerce, said those backing repeal have been heartened by Bush's commitment and the GOP's stronger majorities in Congress. This year is looking ripe for repeal given the greater flexibility of members to focus on issues in a non-election year, and backers of repeal are looking to "strike while the iron's hot," he said. Beram said the estate tax is severely inefficient, with high costs for enforcement relative to the revenue collected, making it a "dead weight for the economy."